Main points:
The company is the leader of middle and high-end seafood in China.
The company is mainly engaged in the cultivation, trade, processing and sales of middle and high-end seafood, and the channel operation of beef and mutton and its by-products. In the first three quarters of 2020, affected by COVID-19 's epidemic, catering consumer demand continued to slump, seafood demand declined, dragging down seafood prices, the company achieved operating income of 3.331 billion yuan, yoy+56.86%; achieved net profit of-455 million yuan, yoy-514.03%. In terms of revenue composition, from 2018 to 2019, the proportion of seafood revenue was maintained at a high level of about 80 per cent, which was the main source of income for the company, followed by beef and mutton and its by-products, accounting for about 20 per cent. In terms of gross profit, from 2018 to 2019, seafood accounted for more than 85 per cent of gross profit, which was the main source of gross profit of the company, and beef and mutton and its by-products accounted for about 10 per cent. In 2019, the company's seafood income was 2.905 billion yuan, accounting for 84.74% of the operating income, and the gross profit was 299 million yuan, accounting for 89.32% of the gross profit.
The supply and demand of salmon is in a tight balance, and the price center is expected to rise. from the supply side, salmon has high requirements for the growth environment. The world's salmon is mainly concentrated in Norway, Chile, Scotland, Canada, the Faroe Islands, Australia and other six regions, of which Norway / Chile accounts for 53% and 25% respectively. In recent years, the control of licensing has become increasingly stringent in various countries. Chile has suspended the acceptance and approval of all licenses, Norway has issued licenses through auctions, and the supply side of the industry has tightened. From the demand side, from 2011 to 2019, the total global demand for salmon increased from 1.4582 million tons to 2.3045 million tons, and CAGR+5.89%, maintained a steady growth pace. Among them, the annual compound speed increase of European Union / American / Brazilian / Asian salmon demand was + 2.01% 7.50%, 1.50%, 4.38%. We judge that the global salmon market as a whole is in a tight balance between supply and demand in the past few years, and with the full implementation of the new Chilean regulations, the global salmon supply side is under pressure, and under the background of steady increase in demand, the gap between supply and demand of salmon has begun to appear. At the same time, considering the gradual weakening of the marginal impact of the COVID-19 epidemic, the demand for salmon is expected to be repaired to a certain extent. The gap between supply and demand will support the price of salmon to stabilize and rebound.
M & An opens the market space, salmon performance can be expected to grow.
Under the current trend of consumption upgrading, the company focuses on the field of high-end animal protein represented by imported seafood and adheres to the strategic route of "global resources + Chinese consumption". Continue to forge the core competitiveness in core category control, omni-channel sales service, quality control, supply chain control, brand building and so on. In 2019, the company completed a large investment in the production and purchase of Australis, a leading Chilean salmon company. Australis is one of the top 10 salmon companies in the world. It has deeply cultivated salmon culture in the past 15 years, covering all aspects of the culture end, and has 95 culture licenses in zones 10, 11 and 12, which will open up a new source of growth for its own development. Help the company to become China's first-class, the world's leading new marine supply chain globalization, professional platform enterprises. With the price of salmon stabilizing and rebounding, the company's profits are expected to be released quickly.
Investment suggestion
We estimate that from 2020 to 2022, the operating income of the company will be 51.97140.298 billion yuan respectively, and the return net profit will be-4.270.86 billion yuan respectively, corresponding to EPS-2.45/0.49/1.13 yuan, and the current stock price corresponding to PE will be-6x28x12x respectively. With reference to the valuation level of the agricultural sector, considering the rising price of salmon, the company's performance will be more flexible and covered for the first time. Give a rating of "overweight".
Risk hint
The risk of epidemic situation, the price of salmon is less than expected, and the risk of policy disturbance.
